[Market ING] KOSPI Surpasses 3,400: Additional Buying vs. Profit-Taking

Weekly KOSPI Expected Range: 3,200?3,500

With the KOSPI settling above the 3,400 mark, pressure for profit-taking is expected to intensify following the sustained rally. As last week’s gains were led by the strength in semiconductors, market attention is anticipated to focus on Micron’s earnings announcement scheduled for September 23.

Yonhap News Agency

Last week, the KOSPI rose by 1.46%, while the KOSDAQ climbed by 1.89%. The KOSPI firmly settled above the 3,400 level last week, hitting all-time highs on six out of the past seven trading days. Lee Kyungmin, a researcher at Daishin Securities, analyzed, “Following the U.S. Federal Open Market Committee’s (FOMC) rate cut in September, continued strength in the semiconductor sector and expectations for government policies enabled the KOSPI to post an 11-day winning streak for the first time since 2019.”

Kang Jinhyuk, a researcher at Shinhan Investment Corp., commented, “From September 2 to 18, the index rose on 12 out of 13 trading days, and last week alone, it set new all-time highs on four out of five days, displaying its true strength.”

The semiconductor sector has driven the KOSPI’s record-breaking rally. Samsung Electronics hit a 52-week high, recovering the 80,000 won level last week, while SK Hynix advanced into the 350,000 won range. Na Junghwan, a researcher at NH Investment & Securities, explained, “The maintenance of major shareholder capital gains tax requirements, expectations for a U.S. Federal Reserve rate cut, and last week’s strong performance in semiconductor stocks all contributed to the KOSPI breaking through the 3,400 barrier.” He added, “Foreign investor buying led to a sharp rise in Samsung Electronics’ share price. Although demand uncertainty was expected to persist in the second half, positive momentum continues due to low inventory at suppliers and robust general server demand.”

Accordingly, the market is likely to pay close attention to Micron’s earnings announcement scheduled for this week. The researcher noted, “On September 23, Micron Technology, often seen as a barometer for the semiconductor industry, will announce its results. With expectations rising for improvements in both artificial intelligence (AI) infrastructure and legacy semiconductor sectors, the key points will be whether the results and guidance meet market expectations and whether the current momentum can be sustained.”

As the stock market’s upward trend continues, pressure for profit-taking is also expected to increase. Kim Jiwon, a researcher at KB Securities, stated, “With consecutive record highs, there is a high likelihood of a tug-of-war between additional buying and profit-taking. Going forward, market attention will likely shift toward tariff issues and third-quarter earnings.”

The researcher added, “While last week’s KOSPI rally confirmed strong upward pressure for the second half, it is also necessary to manage risks stemming from the recent rapid rise. The current KOSPI valuation, with a forward price-to-earnings ratio (PER) of 11.27 times, exceeds the 2024 peak of 11.14 times. It is advisable to refrain from chasing the rally above the 3,400 level.”

Na Junghwan noted, “Given the recent sharp rise in the KOSPI, concerns about profit-taking are increasing.” However, he projected, “Momentum in new growth sectors, such as AI, where the effects of the Federal Reserve’s rate cut cycle and expectations for government policies overlap, is likely to remain valid.” NH Investment & Securities forecasted the KOSPI’s expected range for this week to be between 3,200 and 3,500.

Key events scheduled for this week include Korea’s export data for September 1-20 on September 22, and the U.S. S&P Global Manufacturing and Services Purchasing Managers’ Index (PMI) for September on September 23. On September 25, the U.S. will release new orders for durable goods for August, and on September 26, the U.S. Personal Consumption Expenditures (PCE) Price Index for August will be announced.